Shenandoah Telecommunications (Shentel) has agreed to acquire fellow regional U.S. operator nTelos for US$640 million, including net debt.
Both Shentel and nTelos have wholesale partnerships with Sprint. Under the terms of the deal, nTelos customers will be transferred to a Sprint-branded service managed by Shentel, with the nTelos brand ceasing to exist.
Shentel has also inked a series of deals with Sprint to extend their relationship. Sprint will pay Shentel up to $252 million over a five-to-six-year period through a reduction in retained revenues for the additional spectrum, customers and value it will gain from the amended partnership.
As a result of the nTelos sale, Sprint will gain 297,500 customers to its brand in the south eastern U.S., the vast majority of which will be affiliate customers; the telco said it anticipates moving all its retail customers in the nTelos territory to Shentel. Sprint will also gain a number of retail outlets, which will adopt the Sprint name but will be managed by Shentel, and it will receive nTelos spectrum assets covering 5.4 million people.
nTelos’s operations cover parts of six states: Virginia, West Virginia, Kentucky, Maryland, Ohio and Pennsylvania, while Shentel currently offers mobile services under the Sprint brand in four of those states.
"With this agreement, Sprint will grow its customer base, improve its financial performance, acquire spectrum in important markets and improve and expand 4G LTE coverage to Sprint and nTelos customers," said Michael Schwartz, SVP of corporate and business Development at Sprint, in a statement.
nTelos CEO Rod Dir also talked up the benefits of the deal between his company and Shentel.
"We believe our customers will see a seamless transition to the Sprint platform used by Shentel and will greatly benefit from Shentel’s strong track record of providing reliable wireless service through its expanded and extended affiliate relationship with Sprint," Dir said. "Likewise, the Sprint-branded customer base will continue to benefit from nTelos’s high quality wireless network and robust retail presence," he said.
"This transaction more than doubles the Shentel customer base and further strengthens and expands our solid partnership with Sprint," Shentel said, on its Website. "In addition, it increases our geographic footprint in the Mid-Atlantic region and positions Shentel as one of the top six public wireless service providers in the United States."
The telco said it will invest $300 million in the existing nTelos wireless network, including adding 150 sites to boost coverage.
The firms expect the deal to close in early 2016, subject to various approvals from state and national regulators.
nTelos added that the previously announced wind down of opera tions in its eastern markets will continue as planned and is expected to be completed by 15 November. Late last year the firm announced an agreement to sell its 1900-MHz PCS spectrum in eastern Virginia to T-Mobile US as part of a plan to channel its focus on its western markets.
